Greater Houston: Greater Growth On The Texas Gulf Coast

Port Houston’s Foreign Trade Zone (FTZ #84) is one of the busiest in the nation.

October 1, 2018

Greater Houston: Greater Growth On The Texas Gulf Coast

By the BF StaffFrom the July/August 2018 Issue

Port Houston continues to expand as the amount of cargo moving across its docks grows. Due to this ongoing growth, Port Houston has been expanding and adding state-of-the-art infrastructure in recent years. And the port’s foreign trade zone has been expanding as well. Importers are attracted to the benefits that streamline, reduce or eliminate import duties.

A total of 13 companies joined Foreign Trade Zone #84 in 2017, continuing the ongoing increase of participants into the zone. As the Houston region and its population is growing rapidly, the zone has seen a significant increase in authorizations as more large importers and exporters take advantage of the financial benefits of using FTZ 84.

The total value of cargo in the zone in 2017 was more than $9 billion, which were predominately imports bound for U.S markets. Port Houston’s container volume was the focus of an in-house study of Foreign Trade Zone #84 that was performed in 2017. Results of that study showed that zone users accounted for at least 11 percent of Port Houston’s import twenty-foot-equivalent units (TEUs) and 6.5 percent of all TEUs.

Port Houston’s loaded container imports for 2017 increased by 22 percent, positioning the port as the number one import port in the country in terms of growth. Loaded container exports grew by 5 percent, helping lead to a 13 percent year-over-year growth rate for container throughput.

Much of the import growth can be attributed to the strengthening East Asia market. Inbound transpacific twenty-foot-equivalent unit (TEU) volumes to Port Houston increased by 32 percent in 2017. East Asian imports represents 41 percent of total inbound loaded TEUs. Houston’s import growth over the last several years has shifted the balance to imports at Port Houston. Projections are that import growth will continue, leading to a strong supply of equipment to meet new demand from Houston’s growing plastics exports. Also in 2017, Port Houston completed dredging projects at both the Barbours Cut and Bayport container terminals, allowing the port to service larger, deeper-draft vessels.

For example, Port Houston has just been added to MSC’s Indus service, a container service featuring nine 8,400 TEU vessels. The service calls the U.S. East Coast, India, and the Middle East via the Suez Canal. After adding Port Houston, it began calling the Bayport Container Terminal in early June.

The strength of all this cargo activity drove record operating revenue of $332 million for 2017, shattering the previous record of $292 million set in 2015 by 14 percent.

The combined business through Port Houston’s public facilities generated a record total cash flow of $145 million, surpassing the $128 million record set in 2015. The cash flow generated from operations is critical to funding capital projects that are planned so the port can remain in front of demand from the rapid cargo growth that is projected.

Port Houston’s 10-year development plan includes an investment of nearly $1.2 billion for more ship-to-shore cranes, rubber-tired gantry cranes, container yard space expansion and new technology. The port has a $275 million capital improvement plan for 2018, with most of the funds being used for improvements and expansion at the Bayport and Barbours Cut Container Terminals. Some of these projects include increasing container yard capacity, wharf expansions and additional super post-Panamax ship-to-shore cranes. Three new neoPanamax ship-to-shore cranes capable of working the next generation of larger container vessels are being delivered to Bayport this summer, bringing the STS crane fleet to 26.

And while all of that activity is being carried out, work on a far-reaching blueprint for Port Houston’s long-term future is under way now. An initial draft of the Master Plan entitled “Port Houston 2040” is slated to be completed this year.

Such long-term planning is necessary, since increases in population trigger increases in cargo, particularly consumer goods and other imports. At the same time, the petrochemicals renaissance is driving exports, particularly plastic resins.

One focus of the Port Houston master plan will be the container facilities. The threshold of 2.4 million twenty-foot-equivalent units (TEUs) was surpassed in 2017 and projections indicate the 3 million TEU level is not far off, particularly given the anticipated surge in exports as expanded petrochemical facilities come online. That surge is expected to materialize this year.

Port Houston already is the fastest-growing of the top ten container ports in the United States, according to data from PIERS. The leadership at Port Houston also is looking at the highest and best use for the general cargo terminals and best use of real estate. Beyond preparing for cargo, Port Houston 2040 will look at additional priorities, including continued development of the Houston Ship Channel; stewardship of key resources including security and environment; and the Port’s connections to our community and broad range of stakeholders.

Recently, Port Houston was named Port Operator of the Year during Lloyd’s List 2018 Americas Awards. The Port Operator of the Year Award recognizes the operator that has maintained the highest standards of operational efficiency and customer service throughout the year. The judging criteria include exceptional innovation, improved efficiency and profitability or successful investment in port operations. Finalists for the awards were chosen by a panel of industry executives.

Earlier, Asia Cargo News named Port Houston the Best Seaport in North America, after tallying results from thousands of shippers and industry experts around the globe.

LA MARQUE: GATEWAY TO THE GULF

The City of La Marque is strategically positioned 15 miles southeast of Houston. La Marque serves as a southern anchor for the economically strong Houston/Galveston Region, and its rapidly growing population of nearly 7 million residents. La Marque is the geographic center of Galveston County with more than 14 miles of frontage on the expanding Interstate 45 corridor and is the second-fastest-growing city in the County, just behind League City. Now is the time for commercial and residential expansion in La Marque as we are on the brink of a major development boom.

With the pending expansion of both the I-45 and SH-146 corridors, as well as other major local road ways, Galveston County and La Marque are experiencing an historic level of new infrastructure development. The total investment in new roads in La Marque and Galveston County over a ten-year period will approach $1 billion. The expansion of the I-45 corridor through La Marque is scheduled to begin in 2019. Once completed, reconstructing and widening will take Interstate 45 from a six-lane interstate to an eight-lane interstate from the Galveston Causeway Bridge to Beltway 8.

The newly expanded SH-146 corridor will provide limited access connection and new elevated roadways. This new construction will connect Galveston Bay and the Texas City/La Marque region to both the Pacific and Atlantic coast via I-10 – all without stopping for one single traffic light. In addition, our community will be connected to the Port of Houston Bayport Container Terminal and will have the opportunity to participate in the logistics, distribution and associated commercial developments that follow. The SH-146 expansion will be completed without financial participation from the local tax base because Texas Department of Transportation has dedicated this as a hurricane evacuation corridor. TxDOT will cover all the costs, including right of way acquisition, which is excellent news for local tax payers.

Improved road access paired with access to four international deep-water ports and two Class 1 rail roads (Union Pacific and BNSF) will strengthen our region’s position as an international transportation hub.

The Port of Texas City is the 15th largest port in the United States and the fourth largest in Texas, with annual waterborne capacity exceeding 50 million net tons. The Port of Galveston is now the third largest cruise terminal in the nation, and one of the largest in the world, with annual embarkments approaching 1 million passengers.

The ports of Houston, Texas City and Freeport serve the largest chemical and petrochemical manufacturing complex in the nation with engineering, refining, safety, construction, petrochemical support and transportation industries all thriving in southern Galveston County, and the City of La Marque. All of these business development and support opportunities are available with the added security of a hurricane protection levee system.

Two nearby community colleges offer industry-leading educational programs and customizable training opportunities. Texas A&M Galveston is one of the leading maritime institutions in the nation and the first medical school west of the Mississippi. The University of Texas Medical Branch provides world class education, research and patient care for our region.

La Marque is the Gateway to the Gulf and the Hub of the Mainland, an historic city with roots that stretch back to the Galveston Island boom of the 1880s. A budding downtown revitalization dubbed the Renaissance District promises expansion of community festivals and family activities. For business, La Marque Economic Development Corporation offers creative incentives, an abundance of prime commercial property and build-to-suit opportunities. Discover the possibilities at www.cityoflamarque.org.

The tactical elements of physical security programs often get the most attention, at the expense of strategic factors. - Read: The Invisible Failure Of Facility Security Programs at FacilityExecutive.com.

Ecotrak makes it safer and easier to monitor radon gas in soil, providing quick and reliable information after one to seven days of observation. - Read: Ecotrak Monitors Radon Gas in Soil at FacilityExecutive.com.

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